The European Commission has warned Rome that the April decree invoking Italy’s so-called Golden Power to impose conditions on UniCredit SpA’s takeover of Banco BPM SpA appears to violate Article 21 of the EU Merger Regulation. In a preliminary letter dated 14 July, Brussels said the decree restricts the free movement of capital, overlaps with the European Central Bank’s prudential remit and could be ordered withdrawn if Italy fails to justify it within 20 working days. Regulatory uncertainty deepened on 22 July when Consob suspended the tender for a further 30 days, arguing that BPM shareholders could not fairly assess the all-share offer given the pending EU probe and an Italian court ruling that had already struck down part of the government’s conditions while leaving others—such as an obligation for UniCredit to exit Russia—intact. Later the same day UniCredit terminated its €14.6 billion bid, ending an eight-month effort to create Italy’s largest lender. The bank said it would not waive the Golden Power clause and cited continued delays in obtaining clear terms from the government. Rome is drafting a new decree expected to reinstate most of the original restrictions, underscoring the standoff between national authorities pushing public-interest safeguards and EU institutions seeking to preserve the single market.